Kingdom’s first abattoir primed for Australian cattle

After a series of technical delays and setbacks, the Kingdom’s first industrial slaughterhouse is ready to begin operations and will start production upon receiving its first shipment of 2,000 heads of live Australian cattle in late May, the company behind the project said yesterday.

Local meat distributor SLN Meat Supply Pty Ltd, which began construction of the 11,000-square-metre factory in Preah Sihanouk province in 2013, had initially hoped to have it fully operational by May 2015. However, the project faced a long battle and numerous delays to get to this point.

“There were a lot of technical problems that we had to overcome,” said Hor Sim Leang, SLN’s managing director.

He said the original firm contracted for construction of the factory dragged out completion to six months, from the expected six weeks.

The project also got bogged down in red tape, including tedious delays in customs clearance of the factory’s imported equipment, which was primarily sourced from Australia and Germany.

In addition, SLN had to reconsider the specifications of its cold storage facilities to account for upwardly revised production targets.

“For the freezer unit, we realised we didn’t have the proper electrical capabilities,” said Leang. “We originally planned on 1.3 megawatt freezer, but had to boost it to 1.75 megawatts.”

Altogether, SLN has sunk $22 million into building and equipping the modern abattoir, and “we’re going to spend another $10 million by the end of this year to purchase new machinery as our capacity grows”, Leang said.

With its production line and cold chain now installed, the slaughterhouse now just awaits its first shipment of live cattle.

Some 2,000 heads of Brahman cows are on order from Australia and scheduled to arrive in the last week of May.

Butchering will begin the following week, with an initial target of 200 to 500 cattle a day to be supplied to the domestic market.

Initially, the slaughterhouse will receive about 2,000 heads of cattle every two weeks, Leang said, adding that contracts were already in place to boost imports to 4,000 heads of cattle a week within two months of operation.

“Once my workers have more experience, we will be able to bring in more cattle,” he said, adding that the first shipment of cattle would be accompanied by four Australian technicians to train the staff.

While the company has announced plans to export more than half its production, Leang said initial production would be solely for the domestic market.

He said the company has already signed a memorandum of understanding to supply Thai agricultural giant CP Group, and would look to secure supply contracts with companies in China and Vietnam.

Ross Ainsworth, former chief executive of the Northern Territory Livestock Exporters Association, said SLN’s decision to import Brahman cattle was a wise one, as this breed and its cross-breeds were the best suited for Cambodia’s tropical climate.

The live cattle will be kept on the company’s 76-hectare farm for up to two weeks before slaughter, while SLN is also considering breeding cattle beginning in 2017.

Ainsworth said it also made sense for SLN to start off as a domestic producer as “the standards don’t need to be so high, because the product is sold and eaten relatively quickly”.

A bid for exports “probably won’t occur until the new facility is satisfied that it has all its processes working perfectly”, he added.

The abattoir could eventually tap into China’s fast-growing demand for beef – which grew an estimated 60 per cent in 2015 – provided Beijing clears the technical hurdles surrounding beef imports.

The issues include Cambodia’s status on foot-and-mouth disease, and whether the imported beef products must be cleared from disease in Australia or Cambodia, or both.

“Chinese prices are the highest in the region, so as long as the slaughterhouse is efficient and can get an export permit to China there seems little reason for the Cambodian product not to be commercially competitive for export to China,” Ainsworth said.

Mong Reththy, one of the Kingdom’s largest agro-industrial farmers, said the opening of the slaughterhouse could benefit the Cambodian market by significantly reducing the local cost of beef.

“It is more important to supply the local market rather than looking at international markets,” he said, adding that imported beef is about three times more expensive than the $10.50 per kilo price tag that SLN projects for its round steak.

While Reththy said that the slaughterhouse would likely face difficulties once it begins raising cattle, he remained optimistic about the venture’s business prospects and value.

“I think this business will be beneficial because besides selling meat, they can sell bones, internal organs, as well as skins in our country,” he said.

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